Oil slips below $102 as supply fears ease

Oil prices declined on Monday as increased crude exports from the Middle East and a release of emergency reserves by Group of Seven nations alleviated supply worries. This development offset anxieties regarding potential further damage to Gulf oil infrastructure amid the US-Israeli war against Iran, according to Reuters.

Brent futures dropped 66 cents, or 0.65%, to $101.59 per barrel by 02:40 GMT. Meanwhile, US West Texas Intermediate crude fell 95 cents, or 1.03%, to $90.12.

G7 Reserve Release Impact

Brent surrendered most of its gains from the previous week, while WTI slid 1.6%. This followed a Friday agreement among G7 countries to draw from emergency reserves equivalent to 100 million barrels of diesel and crude, alongside pledges not to restrict energy exports, Reuters reported.

Shipping data indicated that Middle East crude exports exceeded pre-war levels on four out of seven days during the final week of September, despite attacks on vessels transiting the Strait of Hormuz.

Analyst Views on Supply

Tim Waterer, an analyst at KCM Trade, stated that the G7 decision to tap strategic reserves eased immediate supply concerns. He noted this coincided with growing expectations for Saudi export volumes to return to pre-war levels, although shipments are moving at higher costs via less efficient routes.

Waterer added that this combination is sufficient to restrain oil prices currently, despite ongoing risks of further damage to energy infrastructure in the Gulf region.

Houthi Attacks and Aramco Pricing

The Houthis claimed they launched ballistic missiles and drones at Saudi Aramco sites in Riyadh and Khurais in retaliation for airstrikes in Yemen. No confirmation of these attacks was issued by Saudi authorities, according to Reuters.

Simultaneously, Aramco unexpectedly cut November crude prices for Asia to their lowest level in six years.

Geopolitical Tensions Persist

ING analysts noted in a memo that Brent remains above $100 per barrel, supported by continuing geopolitical tensions and rising attacks on commercial ships in the Gulf.

Two informed sources told Reuters that OPEC+ postponed a scheduled review to determine member oil production quotas for 2027. The delay occurred after projects expanding production capacity were disrupted by the war, increasing uncertainty about future output estimates.

In Europe, Ukrainian President Volodymyr Zelenskyy told Reuters in an interview published Saturday that Ukraine will intensify attacks on Russian refineries.